• The Marriott of modern apartment-hotels.
• The Tesla of urban apartment-hotels.
• A modernized Residence Inn.

Major Products/Services of Sonder (SOND):

• Tech-enabled Hospitality Accommodation: Sonder provides stylish, professionally managed apartments, hotel rooms, and villas for short-term or extended stays, enhanced by technology for a seamless guest experience.

Sonder (symbol: SOND) primarily sells directly to individuals and groups seeking accommodation, rather than to other companies. While they may have some corporate bookings, their core business model is centered around serving guests directly. Below are up to three categories of customers that Sonder serves:

• Leisure Travelers: This category includes individuals, couples, families, and groups traveling for vacations, tourism, personal events, or weekend getaways. They seek comfortable, well-designed accommodations for short-term stays in various urban and desirable locations.
• Business Travelers: This category encompasses individuals and corporate groups traveling for work, conferences, meetings, or temporary assignments. They often look for accommodations that offer amenities conducive to productivity, such as reliable Wi-Fi, dedicated workspaces, and convenient locations near business districts.
• Extended-Stay Guests: These customers require accommodation for longer durations, typically several weeks or months. This includes individuals or families undergoing relocation, temporary job assignments, medical treatments, or other life events that necessitate a longer-term, more home-like living arrangement than a traditional hotel can provide.

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• Accelerating Regulatory Restrictions on Short-Term Rentals: Municipalities globally are increasingly enacting and enforcing stricter regulations, taxes, and outright bans or severe limitations on short-term rentals (STRs). This trend, exemplified by recent actions in cities like New York (Local Law 18), Barcelona, and Paris, directly impacts Sonder's ability to acquire, operate, and expand its portfolio of units in key urban markets. The growing scope and pace of these restrictions challenge the fundamental viability and growth potential of Sonder's business model, which relies on the ability to operate short-term accommodations.

• Aggressive Expansion of Traditional Hospitality Players into Extended-Stay and Branded Serviced Apartments/Rentals: Major hotel chains (e.g., Marriott, Hilton, Accor) are actively and increasingly expanding their offerings into the extended-stay, serviced apartment, and curated short-term rental segments. These established players leverage their significant brand recognition, extensive loyalty programs, vast distribution networks, and deep financial resources to compete directly with Sonder. Their growing focus on properties that offer apartment-style amenities and longer-stay options represents an emerging threat by encroaching on Sonder's core market and potentially eroding its competitive differentiation and market share.

1. Portfolio Optimization Leading to Increased Revenue Per Available Room (RevPAR) and Occupancy: Sonder has been actively implementing a portfolio optimization program, which involves exiting or renegotiating leases for underperforming properties. While this may lead to a reduced number of overall units, the strategy is aimed at focusing on higher-yield properties, thereby improving RevPAR and occupancy rates across its refined portfolio. This enhanced efficiency per unit is expected to drive revenue growth.
2. Enhancing Customer Experience and Product Innovation: Sonder's growth strategy includes enhancing its service offerings and property types to attract a broader customer base. The company leverages its proprietary technology platform for streamlined operations, including digital check-in, in-stay support, and checkout, aiming to deliver a consistent and improved guest experience. This focus on product innovation and a tech-driven approach underpins its ability to attract and retain guests.
3. Targeted Expansion in Profitable Markets: Despite the ongoing portfolio optimization, Sonder continues to engage in strategic, targeted market expansion by opening new properties in locations identified for their profitability potential. This approach suggests a more deliberate growth model, adding units that align with the company's financial and operational targets to drive incremental revenue.
4. Operational Efficiencies and Cost Management: A key focus for Sonder is driving consistent improvements in its cost structure and enhancing operational leverage. By reducing operating costs and improving revenue management strategies, the company aims to improve profitability. These efficiencies, while primarily impacting the bottom line, can indirectly support revenue growth by allowing for reinvestment in growth initiatives, offering more competitive pricing, and improving the overall financial health to sustain operations and future expansion.

Share Repurchases

• In January 2022, Legacy Sonder repurchased 1,855,938 shares of common stock, equivalent to 136,281 shares of the Company's common stock after adjustments, to extinguish a promissory note totaling approximately $25.7 million.

Share Issuance

• In April 2025, Sonder issued 17.98 million shares of Preferred Stock, raising $17.98 million.
• During August and November 2024, Sonder issued $43.3 million in Series A Preferred Stock to institutional investors, with $14.7 million received in August and $28.6 million in November.
• On August 5, 2025, the company issued and sold $24.54 million of units, which included senior secured promissory notes and warrants to purchase shares of common stock.

Inbound Investments

• Sonder received a $15 million investment from Marriott International under a strategic licensing agreement, which was completed in April 2025.
• In August 2025, the company secured $24.54 million through the issuance of senior secured promissory notes and warrants.
• In July 2024, Sonder increased its borrowing capacity by $6 million by amending its Note and Warrant Purchase Agreement and issuing delayed draw subordinated secured notes.

Capital Expenditures

• From late 2023 through 2024 and into 2025, Sonder implemented a portfolio optimization program to mitigate losses and assess rents, leading to agreements to exit or reduce rent for approximately 4,500 units across 110 buildings by December 31, 2024.
• As of September 30, 2024, approximately 70 buildings, comprising 2,800 units, had been exited as part of the ongoing portfolio optimization program.